Benchmark
2019 THE WHOLESALE MARKET SUPPLEMENT
STOCKTURN: REMARKABLY CONSISTENT
5-year average
1. Newton Hale 2. EFG
3. Decco 4. Handy Distribution
5. Home Hardware SouthWest 6. Stax Trade Centres 7. Aldridge
8. North West Tools 9. Toolbank
10. Harrison & Clough 11. Bromborough
12. Home Hardware Scotland
Latest -1 -2 -3 year year year year
7.8 9.0 6.5 8.1 6.2 6.1 5.2 3.7 5.1
4.7
4.7 5.0 4.6 5.3 4.2 3.8 3.9 3.6 3.2 3.1 2.7 2.3 2.4 2.6
Source: DIY Week analysis of fi led company accounts
8.1 5.1 6.4 5.5 5.2 4.7 4.2 4.9 4.1 3.3 2.4 2.4
6.6 6.7 6.7 5.2 4.9 4.5 4.3 4.1 3.8 3.5 2.7 2.4
-4 year
7.7 7.6 6.7 5.8 6.0 6.0 6.3 5.2 5.3
5.4
4.7 4.9 4.8 4.2 3.9 4.5 4.1 3.9 3.1 3.2 2.9 3.1 2.3 2.3
M GROSS MARGIN: 5-year average
1. Bromborough 2. Newton Hale 3. Aldridge 4. Toolbank
5. Stax Trade Centres 6. Decco
7. Home Hardware SouthWest 8. Harrison & Clough
9. Home Hardware Scotland 10. EFG
11. North West Tools 12. Handy Distribution
37.4% 37.3% 28.9% 25.2% 27.8% 27.5% 27.8% 27.7% 23.8% 24.4% 22.8% 21.6% 20.0% 20.2% 19.1% 19.1% 17.5% 12.6% 17.1% 13.7% 15.7% 14.1% 11.1% 10.4%
Source: DIY Week analysis of fi led company accounts
ost of the wholesalers listed here are remarkably consistent in their stock management. Over fi ve years, Decco’s
stockturn has varied only slightly, from 6.0 times a year to 6.7 times. At Home Hardware SouthWest, the variation in the same period is between 4.7 times and 5.4; at Stax, from 4.5 to 5.0. Such consistency is understandable, because from the retailer’s viewpoint, stock availability is everything – why would a retailer want to order from a wholesaler who may or may not have the stock? Newton Hale’s stockturn, by contrast – up at 9.0 times a year from just 6.6 times two years earlier – is interesting, to say the least. Likewise EFG, fl uctuating from 6.7 times to 5.1 times and then to 8.1 times in consecutive years.
BROMBOROUGH WELL AHEAD
Latest -1 -2 -3 year year year year
38.9% 37.0% 37.1% 29.5% 31.2% 29.9% 28.1% 27.6% 28.0% 28.0% 28.1% 27.3% 23.0% 24.3% 23.7% 24.0% 22.3% 21.8% 20.2% 20.3% 19.7% 19.0% 16.0% 20.5% 14.5% 20.8% 19.6% 16.4% 16.9% 19.2% 15.6% 15.7% 15.9% 11.3% 10.5% 12.5%
-4 year
36.5% 28.6% 28.0% 27.7% 23.8% 24.3% 19.6% 20.7% 19.7% 19.1% 17.3% 10.7%
T 6 DIY WEEK WHOLESALE MARKET SUPPLEMENT
here’s a huge variation in gross margin recorded by the 12 wholesalers listed here, from Bromborough’s average of 37.4% over the past fi ve years, to Handy
Distribution’s average of 11.1% in the same period. We assume that this at least partly explained by the fact that there is no standard accounting method – some companies confi ne the cost of sales line to the price of goods bought for resale, and others load the line with various other costs as well. But regardless of that, closer analysis reveals a worrying trend: a modest but steady decline in gross margin across the board. Five years ago these 12 companies recorded an average gross margin of 23.0%; a year later it was 22.9%, then 22.6%, then 22.4%, then 21.4%. Newton Hale, Decco, Home Hardware Scotland, EFG and North West Tools have all seen their gross margins fall, in some cases quite signifi cantly.
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